Evidence of meeting #47 for Public Accounts in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cra.
A video is available from Parliament.
4:20 p.m.
Commissioner of Revenue, Canada Revenue Agency
Thank you, Mr. Chair. I'm not sure how much time I have.
4:20 p.m.
Conservative
The Chair Conservative John Williamson
It's nothing personal. You have about 50 seconds, and a few seconds longer, if you're wrapping up, but I have been going over and I paused right there.
It's back to you, sir.
4:20 p.m.
Commissioner of Revenue, Canada Revenue Agency
That's fine.
The first thing I would say is that we can do all of that. We have received a lot of resources over the recent years to battle tax evasion internationally and in Canada, and that's a big part of our agenda. We take that fairness and integrity agenda quite seriously, and we have resources to make sure that we ensure the integrity of the COVID benefits.
The one thing that I would say is that we actually compute the tax gap each year now. We're one of the jurisdictions in the world that does that. That's transparency in terms of what we compute as being how much tax is being collected relative to what could be collected. That's one contribution.
The big thing that I wanted to put in is that this is not just a Canadian issue, this is a global issue. One of the key things we're doing is working with our partners in other countries to try to make sure we're sharing information and we're working collectively, because often these are multinationals that we need to get at. That's the place where we're making, potentially, the biggest strides, but it is a very complex area and we don't get results overnight.
I do feel like we're taking very seriously both of those agendas.
4:20 p.m.
Conservative
The Chair Conservative John Williamson
Thank you.
That ends our first round. I will give witnesses a little hint. I tend to turn my microphone on, the little red light, when the time is out, and I do allow you to finish your thoughts that run over, which I'll continue to do until my colleagues tell me to stop doing that and to cut it at six or five minutes exactly. It's just a little hint, when you see my red mike go on, that means the red light's blinking.
Turning now to Mr. McCauley, you have the floor for five minutes.
February 2nd, 2023 / 4:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks, Mr. Chair. Welcome back, witnesses.
Mr. Hamilton, I want to get back to a theme I was asking about when you were with us the last time. Who made the decision to use a self-attestation, a very limited prepayment control, especially knowing this would lead to very large eligibility problems? Was it the decision of the department or was it a political decision?
4:20 p.m.
Commissioner of Revenue, Canada Revenue Agency
That was a decision by the government, I think, approved in Parliament.
4:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Did you advise the government that there would be a very high risk of ineligible payments?
4:20 p.m.
Commissioner of Revenue, Canada Revenue Agency
I think it was well recognized that you would increase the risk. I don't usually talk about the advice I give to the government in public, but—
4:20 p.m.
Commissioner of Revenue, Canada Revenue Agency
—I think it is recognized that, if you take that kind of an approach, you are increasing risk and then you have to have a comfort with that or a plan to mitigate the risk.
4:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Could we have done it differently without an open-ended self-attestation that left such a large risk for taxpayers? I understand the whole role of it's an emergency, get it out, etc., but could we have done it differently with a bit better prepayment controls?
4:20 p.m.
Commissioner of Revenue, Canada Revenue Agency
It's hard for me to see a better way at the time, recognizing where we were. If you look at what other countries have done around the world in that same circumstance, they adopted their own variants of these kinds of programs.
Could some things have been done a bit better on our part or others'? Yes, potentially, but we were all working very hard to get this out and to get the money into the hands of people right away. I think we were cognizant of the risks and the necessity to come back and check at the end of the day, but it's hard for me—and I'm only one person—to think of what that better way might have been.
4:25 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
There was a prepayment control added in September 2020 that you claim blocked about 700,000 unwarranted applicants. What was that prepayment control added that blocked the 700,000?
4:25 p.m.
Commissioner of Revenue, Canada Revenue Agency
Perhaps I'll turn to one of my colleagues, Marc Lemieux. He can explain in a bit more detail what we did there.
4:25 p.m.
Assistant Commissioner, Collections and Verification Branch, Canada Revenue Agency
What we did there was because we had just received the income information from the previous year, 2019. What we decided to do was to block the applicants we were seeing were not eligible because they were not meeting the minimum income of $5,000, and we were asking them to contact us to be able to provide us information showing that they were eligible before we would make the payment. That's what we call the prepayment validation step.
4:25 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Could we not have done that when we started this using T4 submission information or payroll submissions?
4:25 p.m.
Assistant Commissioner, Collections and Verification Branch, Canada Revenue Agency
At the time when the program was launched, the most recent information we had was for the 2018 year.
4:25 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
It was for 2018. Okay.
Was there a specific decision-maker to add these controls in the summer of 2020, or did it just come up organically? Mr. Hamilton talked about new intelligence and data that came up. Did some red flags pop up? What made you decide to add the controls?
4:25 p.m.
Commissioner of Revenue, Canada Revenue Agency
I would say, yes, that was a decision that we took. You have to remember that—
4:25 p.m.
Conservative
4:25 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Did you have to get approval from the government to make changes?
4:25 p.m.
Commissioner of Revenue, Canada Revenue Agency
Yes, that's right. That would be our decision. We informed others, but you have to remember how this was set up. You only had to have that $5,000 income in the previous year or the most recent 12 months. We only had 2018 information, because people hadn't filed their 2019 form yet.
4:25 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
You're saying that, post-2018, then, there's no ability for the government to know what people had earned or were making to verify their claims.